The dispute over compensation for buying out chicken retailers' licences moved a step closer to resolution last night when most agreed to accept the government's offer, an industry representative said.

This came as Secretary for Food and Health York Chow Yat-ngok hinted that chicken farmers might be offered slightly more than the previously announced package of between HK$680,000 and HK$15 million.

But Dr Chow warned the farmers that they risked losing their licences if they took their chickens to the streets in protest on Tuesday during the annual pro-democracy march from Victoria Park.

'I hope that they will not do anything that is unlawful,' he said.

Dr Chow said the biggest chicken farm might be offered HK$17 million, up from HK$15 million.

Last night, 260 chicken retailers attended a late-night meeting in Yau Ma Tei to discuss the HK$1.1 billion overall compensation package. The buyout is designed to help halt the spread of bird flu.

Steven Wong Wai-chuen, the chairman of the Poultry Wholesalers and Retailers Association, said last night that most retailers would accept the buyout, but he refused to disclose the exact number of takers.

'I worry that if we disclose the actual number, the government will not increase the amount,' Mr Wong said.

Farmers and wholesalers want 30 to 50 per cent more than is being offered.

The package for the 469 chicken retailers is about HK$514 million. The government added HK$100 million last Tuesday, hours after the Executive Council approved the resumption of the sale of live chickens.

Under the new offer, HK$64 million has been added to the compensation deal for holders of small stalls, with areas less than 45 square metres, while an extra HK$32 million has been offered to holders of larger stalls.

Meanwhile, Dr Chow also appealed to the live-poultry sector, particularly chicken farmers, to continue the discussions in a rational and pragmatic manner.

Last week, farmers against the government's buyout plan warned they might unleash their chickens on the streets during the rally. However, Dr Chow reiterated that the government had already raised its offer and there was little room to raise it again.

Chicken retailers will have until July 24 to decide whether to accept the ex gratia payment, and farmers and transporters until September 24.

A spokeswoman for the Agriculture Department said farmers' licences stipulated that they release their chickens only to the wholesale market.

Each time farmers deliver poultry to Cheung Sha Wan wholesale market, they must get department approval as part of bird-flu control measures.

On Wednesday, live-chicken sales will resume but with no overnight stocking allowed - all unsold chickens will have to be slaughtered.

However, only 27 of the 64 markets in the city have so far passed the sanitation tests, according to the Food and Environmental Hygiene Department. It will continue to inspect the stalls every day for a month.